The Newcastle-based firm, which has about 1,600 shops, said that like-for-like sales in the first 17 weeks to April 26 were up 3.7 per cent, compared to a decline of 4.4 per cent in the first quarter last year.

In January, the company posted its first sales growth for two years in the last quarter of 2013.

Greggs said early in 2013 that it planned to return to growth via its food-on-the-go business, selling sandwiches and hot pastries, and abandoned a previous strategy to build cafes and supply third parties.

Twenty new shops have been opened, 28 closed and 66 refitted to cater for the new target market. It is proposed that another 200 will be refurbished this year.

"Market conditions remain highly competitive but we are encouraged by the performance in the year to date," chief executive Roger Whiteside, said, adding that Greggs expects to deliver a good first half outcome.

"The second half is likely to be more challenging as we come up against relatively stronger sales comparables and likely cost inflation. Overall we expect to deliver satisfactory financial results for the year."